A Handbook of Human Resource Management Practice

It may be helpful to set out reward strategies on paper for the record and as a basis
for planning and communication. But this should be regarded as no more than a
piece of paper that can be torn up when needs change – as they will – not a tablet of
stone.

COMPONENTS OF AN EFFECTIVE REWARD STRATEGY

Brown (2001) has suggested that effective reward strategies have three components:

Strategic reward ❚ 651

Analyse business

strategy and

business needs

Develop HR strategy

Analyse present

HR and reward

policies and

practices

Assess needs of

stakeholders – line

managers and

other employees

Consult and

involve senior

management

Consult, involve

and communicate

with employees

Brief and train communicationsFinal

Develop and justify

reward strategy and

define guiding

principles

Prepare and

test plan

Implement plan

Review and modify

as required

Figure 43.3 Amodel of the reward strategy development process